SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 1998
AlliedSignal Inc.
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-8974 22-2640650
-------------- ------------ --------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
101 Columbia Road
P.O. Box 4000
Morristown, New Jersey 07962-2497
---------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 455-2000
<PAGE>
Item 5. Other Events.
-------------
On February 5, 1998, AlliedSignal Inc. (the "Company") and
J.P. Morgan Securities Inc., Goldman, Sachs & Co., and Merrill
Lynch, Pierce, Fenner & Smith Incorporated executed and delivered
an Underwriting Agreement with respect to the offer and sale of
the Company's 5-3/4% Dealer remarketable securities SM ("Drs."
SM) Due March 15, 2011. The transaction closed on February 10, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS:
The exhibits listed below relate to the
Registration Statement (No. 33-64245) on Form S-3 of the
Registrant and are filed herewith for incorporation by reference
in such Registration Statement.
Exhibit No. Description of Exhibit
- ----------- ----------------------
1 Underwriting Agreement dated
February 5, 1998 between the Registrant
and J.P. Morgan Securities Inc., Goldman
Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
4.1 Form of 5-3/4% Dealer remarketable
securities Due March 15, 2001 of the
Registrant.
4.2 Remarketing Agreement dated as
of February 10, 1998 between the
Registrant and J.P. Morgan Securities
Inc., as remarketing dealer.
--------------------
SM - "Dealer remarketable securities" and "Drs." are service
marks of J.P. Morgan Securities Inc.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
AlliedSignal Inc.
(Registrant)
Date: February 9, 1998 By: /s/ Richard F. Wallman
-----------------------------
Richard F. Wallman
Senior Vice President and
Chief Financial Officer
<PAGE>
ALLIEDSIGNAL INC.
5-3/4% Dealer remarketable securitiesSM Due March 15, 2011
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II hereto
AlliedSignal Inc., a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are
acting as representatives (the "Representatives"), the
aggregate principal amount set forth in Schedule II hereto
of its debt securities identified on Schedule I hereto (the
"Purchased Securities"), to be issued under an indenture
dated as of October 1, 1985, as supplemented by the First
Supplemental Indenture thereto dated as of February 1, 1991
and the Second Supplemental Indenture dated as of November
1, 1997, each between the Company and The Chase Manhattan
Bank, as Trustee (the "Trustee") (as so supplemented, the
"Indenture").
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each
Underwriter that:
(a) The Company presently meets, and has met at
all times since the initial filing referred to below, the
requirements for use of Form S-3 under the Securities Act of
1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") one or more
registration statements on such Form (the file number or
file numbers of which are set forth in Schedule I hereto),
which have become effective, for the registration under the
Act of the Purchased Securities. Such registration
statement or registration statements, as amended at the date
of the Agreement, meet the requirements set forth in Rule
415(a)(1)(x) under the Act and comply in all other material
respects with said Rule. The Company proposes to file with
the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in the most
recent such registration statement relating to the Purchased
Securities and the plan of distribution thereof and has
previously advised you of all further information (financial
and other) with respect to the Company to be set forth
therein. Such registration statement or registration
statements, including the exhibits thereto, as amended at
the date of this Agreement, is (or, if more than one, are
collectively) hereinafter called the "Registration
Statement"; such prospectus in the form in which it appears
in the Registration Statement is hereinafter called the
"Basic Prospectus"; and such supplemented form of
prospectus, in the form in which it shall be first filed
with the Commission pursuant to Rule 424 (including the
Basic Prospectus as so supplemented) is hereinafter called
the "Final Prospectus." Any preliminary form of the Final
Prospectus which has heretofore been filed pursuant to Rule
424 is hereinafter called the "Preliminary Final
Prospectus." Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer
to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934 (the "Exchange
Act") on or before the date of this Agreement, or the issue
date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act
after the date of this Agreement, or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(b) As of the date hereof, when the Final
Prospectus is first filed pursuant to Rule 424 under the
Act, when, prior to the Closing Date (as hereinafter
defined), any amendment to the Registration Statement
becomes effective (including the filing of any document
incorporated by reference in the Registration Statement),
when any supplement to the Final Prospectus is filed with
the Commission and at the Closing Date, (i) the
Registration Statement, as amended as of any such time, the
Final Prospectus, as amended or supplemented as of any such
time and the Indenture will comply in all material respects
with the applicable requirements of the Act, the Exchange
Act, and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder and (ii)
neither the Registration Statement, as amended as of any
such time, nor the Final Prospectus, as amended or
supplemented as of any such time, will contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided,
however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement
which shall constitute the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust
Indenture Act or (ii) the information contained in or
omitted from the Registration Statement or the Final
Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished
to the Company by or on behalf of any Underwriter through
the Representatives specifically for use in the Registration
Statement or the Final Prospectus.
2. Purchase and Sale. Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto the principal amount of
Purchased Securities set forth opposite such Underwriter's
name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment
for the Purchased Securities shall be made at the office, on
the date and at the time specified in Schedule I hereto (or
such later date not later than five business days after such
specified date as the Representatives shall designate),
which date and time may be postponed by agreement between
the Representatives and the Company or as provided in
Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date").
Delivery of a global certificate (the "Global Note")
representing the Purchased Securities shall be made to the
Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer of same-
day funds. The Global Note to be delivered to the
Representatives shall be deposited with and registered in
the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"). The interests of the owners of the Notes
will be represented by book entries on the records of DTC
and participating members thereof. Notes in definitive form
shall be available only under limited circumstances.
4. Agreements. The Company agrees with the
several Underwriters that:
(a) Prior to the termination of the offering of
the Purchased Securities, the Company will not file any
amendment of the Registration Statement or supplement
(including the Final Prospectus) to the Basic
Prospectus unless the Company has furnished you a copy for
your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be mailed to the Commission
for filing pursuant to Rule 424 by first class, certified or
registered mail or will cause the Final Prospectus to be
filed with the Commission pursuant to said Rule. The
Company will promptly advise the Representatives (i) when
the Final Prospectus shall have been mailed to the
Commission for filing or filed with the Commission pursuant
to Rule 424, (ii) when any amendment to the Registration
Statement relating to the Purchased Securities shall have
become effective, (iii) of any request by the Commission for
any amendment of the Registration Statement or amendment of
or supplement to the Final Prospectus or for any additional
information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension
or the qualification of the Purchased Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a Prospectus relating to
the Purchased Securities is required to be delivered under
the Act, any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or
supplement the Final Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the
Company promptly will (i) prepare and file with the
Commission, subject to the first sentence of paragraph (a)
of this Section 4, an amendment or supplement which will
correct such statement or omission or an amendment which
will effect such compliance and (ii) supply any supplemented
prospectus to you in such quantities as you may reasonably
request.
(c) The Company will make generally available to
its securities holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the current fiscal
quarter of the Company, an earnings statement (which need
not be audited) of the Company and its subsidiaries,
covering such 12-month period, which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the
Representatives and counsel for the Underwriters, without
charge, copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which
shall become effective on or prior to the Closing Date and,
so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and
any amendments thereof and supplements thereto as the
Representatives may reasonably request. The Company will
pay the expenses of printing all documents relating to the
offering.
(e) The Company will arrange for the
qualification of the Purchased Securities for sale under the
laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so
long as required for the distribution of the Purchased
Securities and will arrange for the determination of the
legality of the Purchased Securities for purchase by
institutional investors.
(f) Until the business day following the Closing
Date, the Company will not, without the consent of the
Representatives, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce
the offering of, any debt securities or warrants covered by
the Registration Statement or any other registration
statement filed under the Act.
5. Conditions to the Obligations of the
Underwriters. The obligations of the Underwriters to
purchase the Purchased Securities shall be subject to the
accuracy of the representations and warranties on the part
of the Company contained herein as of the date hereof, as of
the date of the effectiveness of any amendment to the
Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by
reference therein) and as of the Closing Date, to the
accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and
to the following additional conditions:
(a) No stop order suspending in whole or in part
the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings
for that purpose shall have been instituted or threatened;
and the Final Prospectus shall have been filed or mailed for
filing with the Commission not later than 5:00 P.M., New
York City time, on the business day following the date
hereof.
(b) The Company shall have furnished to the
Representatives the opinion of its General Counsel, or of J.
Edward Smith, Esq., a Senior Counsel, Corporate and Finance,
of the Company, or such other counsel to the Company
reasonably acceptable to the Representatives, dated the
Closing Date, to the effect that:
(i) each of the Company and each subsidiary of
the Company that is a "significant subsidiary" as defined in
Rule 405 of Regulation C promulgated under the Act (each a
"Significant Subsidiary" and collectively the
"Significant Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own its
properties and conduct its business as described in the
Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts
material business;
(ii) all the outstanding shares of capital
stock of each Significant Subsidiary have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the
Final Prospectus, all outstanding shares of capital
stock of the Significant Subsidiaries (except for
directors' qualifying shares) are owned by the Company
either directly or through wholly-owned subsidiaries
free and clear of any perfected security interest and,
to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as set forth in the Final Prospectus;
the Purchased Securities conform to the description
thereof contained in the Final Prospectus; and, if the
Purchased Securities are to be listed on the New York
Stock Exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a
preliminary listing application and all required
supporting documents with respect to the Purchased
Securities with the New York Stock Exchange and such
counsel has no reason to believe that the Purchased
Securities will not be authorized for listing, subject
to official notice of issuance and evidence of
satisfactory distribution;
(iv) the Indenture has been duly
authorized, executed and delivered; the Indenture has been
duly qualified under the Trust Indenture Act; the Indenture
constitutes a valid and legally binding instrument
enforceable against the Company in accordance with
its terms, except that such enforcement may
be subject to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally and general principles of equity from time
to time in effect; and the Purchased Securities have been
duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to
this Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits of the
Indenture;
(v) the remarketing agreement between the
Company and J.P. Morgan Securities Inc., as remarketing
dealer with respect to the Purchased Securities (the
"Remarketing Agreement") has been duly authorized,
executed and delivered by the Company and constitutes a
valid and legally binding instrument enforceable against
the Company in accordance with its terms, except that
such enforcement may be subject to applicable
bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally and
general principles of equity from time to time in
effect; the Remarketing Agreement conforms in all
material respects to the description thereof contained
in the Final Prospectus;
(vi) to the best knowledge of such
counsel, there is no pending or threatened action, suit or
proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company or
any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there is
no franchise, contract or other document of a character
required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and the statements included
or incorporated in the Final Prospectus describing any legal
proceedings or material contracts or agreements relating to
the Company and its subsidiaries fairly summarize the
matters therein described;
(vii) the Registration Statement and any
amendments thereto have become effective under the Act;
the Final Prospectus has been filed in the manner and
within the time period required by Rule 424; to the best
knowledge of such counsel, no stop order suspending in
whole or in part the effectiveness of the Registration
Statement, as amended, has been issued, no proceedings
for that purpose have been instituted or threatened, and
the Registration Statement, the Final Prospectus and
each amendment thereof or supplement thereto as of their
respective effective or issue dates (other than the
financial statements and other financial information
contained therein as to which such counsel need express
no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the
Exchange Act, and the respective rules thereunder; and
such counsel has no reason to believe that each
registration statement included in the Registration
Statement, or any amendment thereof, at the time it
became effective and at the date this Agreement,
contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Final Prospectus, as amended or
supplemented, includes any untrue statement of a
material fact or omits to state a material fact
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(viii) this agreement has been duly
authorized, executed and delivered by the Company;
(ix) no consent, approval, authorization
or order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein (including entering into the
Remarketing Agreement), except such as have been
obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with
the purchase and distribution of Purchased Securities by
the Underwriters and such other approvals (specified in
such opinion) as have been obtained;
(x) neither the issue and sale of the
Purchased Securities, nor the consummation of any other
of the transactions contemplated herein or in the
Remarketing Agreement, nor the fulfillment of the terms
hereof will conflict with, result in a breach or
violation of, or constitute a default under the
certificate of incorporation or by-laws of the Company
or the terms of any indenture or other agreement or
instrument known to such counsel to which the Company or
any of its Significant Subsidiaries is a party or bound,
or any order of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
Significant Subsidiaries; and
(xi) no holders of securities of the
Company have rights to the registration of such securities
under the Registration Statement.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any
jurisdictions other than the States of Delaware and New York
or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and
public officials.
(c) The Representatives shall have received from
Cravath, Swaine & Moore, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Purchased Securities,the
Remarketing Agreement, the Indenture, the Registration
Statement, the Final Prospectus and other related matters as
the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such
matters.
(d) The Representatives shall have received from
Davis Polk & Wardwell, special counsel for the Underwriters,
such opinion or opinions, dated the Closing Date, with
respect to certain tax matters relating to respect to the
issuance and sale of the Purchased Securities and other
related matters as the Representatives may reasonably
require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Company shall have furnished to the
Representatives a certificate of the Company signed by the
Chief Financial Officer, the Treasurer, any Assistant
Treasurer or the Controller of the Company, dated the
Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration
Statement, the Final Prospectus and this Agreement and that:
(i) the representations and warranties
of the Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the
same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending in whole
or in part the effectiveness of the Registration Statement,
as amended, has been issued and no proceedings for that
purpose have been instituted or, to their knowledge,
threatened; and
(iii) since the date of the most recent
financial statements included in the Final Prospectus, there
has been no material adverse change in the condition
(financial or other), earnings, business or properties of
the Company and its Significant Subsidiaries, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Final Prospectus.
(f) At the Closing Date, Price Waterhouse LLP
shall have furnished to the Representatives a letter or
letters (which may refer to letters previously delivered
to one or more of the Representatives), dated as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and
regulations thereunder, that the response to Item 10 of
the Registration Statement is correct insofar as it
relates to them and stating in effect that:
(i) in their opinion the audited
financial statements, including financial statement
schedules, if any, incorporated in the Registration
Statement and the Final Prospectus audited by them
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the related published rules and
regulations with respect to registration statements on
Form S-3;
(ii) as indicated in their reports, they
have made reviews in accordance with standards established
by the American Institute of Certified Public Accountants of
any unaudited interim consolidated data incorporated
in the Registration Statement and the Final Prospectus;
(iii) on the basis of certain specified
procedures (but not an audit in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect
to the comments set forth in such letter consisting of a
reading of the minutes of the meetings of the
stockholders, directors and the retirement plans and
audit committees of the Company through a specified date
not more than five business days prior to the date of
delivery of such letter; a reading of any unaudited
interim consolidated financial data of the Company
incorporated in the Registration Statement and the Final
Prospectus and the latest consolidated financial data
made available by the Company; and inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters of the Company and its
subsidiaries, nothing came to their attention which
caused them to believe that:
(1) any unaudited interim
financial data included or incorporated in the Registration
Statement and the Final Prospectus do not comply in all
material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q
and the published rules and regulations thereunder or are
not stated on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus; or
(2) with respect to the period subsequent to the
date of the most recent financial statements incorporated in
the Registration Statement and the Final Prospectus, there
were any changes, at a specified date not more than five
business days prior to the date of the letter, in the long-
term debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the shareholders'
equity of the Company and its subsidiaries as compared with
the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration
Statement and the Final Prospectus, or for the period from
the date of the most recent financial statements
incorporated in the Registration Statement and the Final
Prospectus to such specified date, if such information
is available for such period, there were any decreases, as
compared with the corresponding period in the preceding
year, in net sales, in income from continuing operations
before taxes on income, income from continuing operations,
net income, earnings applicable to common stock or earnings
per share of common stock, of the Company and its
consolidated subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives;
and
(3) the letter shall also state that
they have carried out certain other specified
procedures, not constituting an audit, with respect to
certain amounts, percentages and financial nformation which
are included or incorporated by reference in the
Registration Statement and the Final Prospectus and which
are specified by the Representatives, and have found such
amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other
records of the Company and its subsidiaries identified in
such letter.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Final Prospectus, there shall not have been (i) any change
or decrease specified in the letter or letters referred to
in paragraph (f)of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting
the business or properties of the Company and its
Significant Subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment
of the Representatives, so material and adverse as to make
it impractical or inadvisable to proceed with the offering
or the delivery of the Purchased Securities as contemplated
by the Registration Statement and the Final Prospectus.
(h) Subsequent to the execution of this
Agreement, there shall not have been any decrease in the
rating of any of the Company's debt securities by any
"nationally reorganized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating
that does not indicate the direction of the possible
change.
(i) On or prior to the Closing Date, the Company
shall have executed and delivered the Remarketing
Agreement in a form acceptable to J.P. Morgan Securities
Inc., as remarketing dealer thereunder.
(j) Prior to the Closing Date, the Company shall
have furnished to the Representatives such further
information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section
5 shall not have been fulfilled in all material respects
when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this
Section 5 shall be delivered at the office of Cravath,
Swaine & Moore, counsel for the Underwriters, at Worldwide
Plaza, 825 Eighth Avenue, New York, New York, on the Closing
Date.
6. Expenses. The Company covenants and agrees
with the several Underwriters that the Company will pay or
cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in
connection with the registration of the Purchased Securities
under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration
Statement, any Preliminary Final Prospectus and the Final
Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any
Agreement among Underwriters, this Agreement, the
Remarketing Agreement, the Indenture, the blue sky and legal
investment memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the
Purchased Securities; (iii) all expenses in connection with
the qualification of the Purchased Securities for offering
and sale under state securities laws as provided in Section
4(e) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification
and in connection with the blue sky and legal investment
surveys; (iv) any fees charged by securities rating services
for rating the Purchased Securities; (v) the filing fees
incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the
Purchased Securities; (vi) the cost of preparing the
Purchased Securities; (vii) the fees and expenses of the
Trustee and any agent of the Trustee, and the fees and
disbursements of counsel for the Trustee in connection with
the Indenture and the Purchased Securities; and (viii) all
other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however,
that, except as provided in this Section, Section 7 and
Section 8 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Purchased Securities by them,
and any advertising expenses connected with any offers they
may make.
7. Reimbursement of Underwriters' Expenses. If
the sale of the Purchased Securities provided for herein is
not consummated because any condition to the obligations of
the Underwriters set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or
comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-
of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of
the Purchased Securities.
8. Indemnification and Contribution. (a) The
Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents
of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other
Federal or State statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration
statement included in the Registration Statement for the
registration of the Purchased Securities as originally filed
or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in
any amendment thereof or supplement thereto or arise out of
or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
(i) the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for use
therein, and (ii) such indemnity with respect to the Basic
Prospectus or any Preliminary Final Prospectus shall not
inure to the benefit of any Underwriter (or any person
controlling such Underwriter) to the extent that any such
loss, claim, damage or liability of such Underwriter results
from the fact that such Underwriter sold Purchased
Securities to a person to whom there was not sent or given a
copy of the Final Prospectus (or the Final Prospectus as
amended or supplemented) excluding documents incorporated
therein by reference at or prior to the confirmation of the
sale of such Purchased Securities to such person in any case
where such delivery is required by the Act if the Company
has previously furnished copies thereof to such
Underwriter. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to
indemnify and hold harmless the Company, each of its
directors, officers, employees and agents, each of its
officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of
such Underwriter through the Representatives specifically
for use in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The
Company acknowledges that the statements set forth in
Schedule III of this Agreement constitute the only
information furnished by or on behalf of the several
Underwriters for inclusion in the documents referred to in
the foregoing indemnity, and you, as the Representatives,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of
such action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to
notify the indemnified party will not relieve it from any
liability which it may have to an indemnified party
otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties
which are different from or additional to those available to
the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election to so assume
the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the
case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties
to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying
party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the
counsel referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in paragraph (a) of this Section 8 is due in
accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise,
the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection
with investigating or defending the same) to which the
Company and one or more of the Underwriters may be subject
in such proportion so that the Underwriters are responsible
for that portion represented by the percentage that the
underwriting discount bears to the sum of such discount and
the purchase price of the Purchased Securities specified in
Schedule I hereto and the Company is responsible for the
balance; provided, however, that (y) in no case shall any
Underwriter (except as may be provided in any agreement
among Underwriters relating to the offering of the Purchased
Securities) be responsible for any amount in excess of the
underwriting discount applicable to the Purchased Securities
purchased by such Underwriter hereunder and (z) no person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act shall have the
same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clause
(z) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be
made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may
be sought of the commencement thereof, but the omission to
so notify such party or parties shall not
relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the
Purchased Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay
for (in the respective proportions which the amount of
Purchased Securities set forth opposite their names in
Schedule II hereto bears to the aggregate amount of
Purchased Securities set forth opposite the names of all the
remaining Underwriters) the Purchased Securities which the
defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the
aggregate amount of Purchased Securities which the
defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of
Purchased Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of
the Purchased Securities, and if such nondefaulting
Underwriters do not purchase all the Purchased Securities,
this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a
default by any Underwriter as set forth in this Section 9,
the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representatives shall determine
in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject
to termination in the absolute discretion of the
Representatives by notice given to the Company prior to
delivery of and payment for the Purchased Securities if
prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the New York
Stock Exchange or trading in securities generally on the New
York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iii) there shall
have occurred any outbreak or material escalation of major
hostilities in which the United States is involved, or a
declaration of war by the Congress of the United States, or
other substantial national or international calamity or
crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed
with the offering or delivery of the Purchased Securities as
contemplated by the Final Prospectus.
11. Representations and Indemnities to Survive.
The respective agreements, representations, warranties,
indemnities and other statements of the Company or its
officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the
Purchased Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this
Agreement.
12. Authority of Representatives; Notice. In all
dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made by you jointly
or by J.P. Morgan Securities Inc. on behalf of you as the
Representatives.
All communications hereunder will be in writing
and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telecopied and
confirmed to them, at J.P. Morgan Securities Inc., 60 Wall
Street, New York, New York 10260 (telephone: (212) 648-2439
telecopy: (212) 648-5909) Attention: David Olsen; or, if
sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 101 Columbia Road, P.O.
Box 4000, Morristown, New Jersey 07962 (telephone: 973-455-
5109; telecopy: 973-455-5189) Attention: Assistant
Treasurer.
13. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors,
employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have rights or
obligations hereunder.
14. Applicable Law. This Agreement will be
governed by and construed in accordance with the laws of the
State of New York, without regard to the choice of laws
provisions thereof.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us
the enclosed duplicate hereof, whereupon this letter and
your acceptance shall represent a binding agreement among
the Company and the several Underwriters.
Very truly yours,
ALLIEDSIGNAL INC.
By:/s/ John W. Gamble, Jr.
__________________________
John W. Gamble, Jr.
Assistant Treasurer
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as
of the date specified in Schedule I hereto.
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
As Representatives of the Several
Underwriters named in Schedule II
attached hereto.
J.P. MORGAN SECURITIES INC.
By:/s/ John Simmons
________________________
John Simmons
Vice President
<PAGE>
SCHEDULE I
Underwriting Agreement dated February 5, 1998
Registration Statement No. 33-64245
Representatives:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
Closing Date, Time and Location: February 10, 1998, 11:00 a.m.,
at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue,
New York, New York
Sale, Purchase Price and Description of Purchased Debt Securities:
Title: 5-3/4% Dealer remarketable securitiesSM
("Drs. SM") Due March 15, 2011
Principal amount and currency: U.S. $200,000,000
Purchase price: 99.401% of principal amount, plus
accrued interest, if any, from February 10, 1998
Interest rate: 5-3/4% (through March 15, 2001, at
which time the interest rate is redetermined)
Interest payment dates: Semiannually on March 15 and
September 15, commencing September 15, 1998
Maturity: March 15, 2011
Sinking fund provisions: None
Remarketing Agreement: The Company and J.P. Morgan
Securities Inc., as remarketing dealer (the "Remarketing
Dealer") shall execute and deliver a remarketing agreement
on or prior to the Closing Date. In consideration therefor,
the Remarketing Dealer shall make a payment to the Company
on the Closing Date equal to 2.590% of the principal amount
of the Drs.
Bearer or registered: Registered book-entry form in
denominations of $1,000 and any integral multiple of $1,000.
Other provisions: As set forth in the Prospectus
Supplement dated February 5, 1998
<PAGE>
SCHEDULE II
Principal Amount
Underwriter of Purchased
Securities
J.P. Morgan Securities Inc. .............. $ 68,000,000
Goldman, Sachs & Co. .................... 66,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................66,000,000
Total...................................$200,000,000
<PAGE>
SCHEDULE III
INFORMATION IN THE FINAL PROSPECTUS SUPPLIED BY THE
UNDERWRITERS
The first sentence of the last paragraph of the cover page.
The first paragraph on page S-2.
The third paragraph, the second sentence of the fourth
paragraph, the fifth paragraph and the last paragraph under
the heading "Underwriting".
Other Provisions:
[Other terms from draft remarketing agreement and prospectus
supplement]
<PAGE>
SCHEDULE II
Principal Amount
Underwriter of Purchased
Securities
J.P. Morgan Securities Inc. .............. $68,000,000
Goldman, Sachs & Co. .................... 66,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................... 66,000,000
Total...................................$200,000,000
<PAGE>
SCHEDULE III
INFORMATION IN PROSPECTUS SUPPLEMENT SUPPLIED BY THE
UNDERWRITERS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
ALLIEDSIGNAL INC.
5-3/4% Dealer remarketable security ("Drs. ")
due March 15, 2011
REGISTERED NO. 1 $200,000,000
REGISTERED CUSIP: 019512 AL 6
ALLIEDSIGNAL INC., a Delaware corporation (hereinafter
called the "Company"), for value received, hereby promises to pay
to CEDE & CO. or registered assigns, the principal sum of TWO
HUNDRED MILLION U.S. DOLLARS ($200,000,000) on March 15, 2011,
and to pay interest, semi-annually on March 15 and September 15
of each year (each, an "Interest Payment Date"), on said
principal sum at the rate per annum specified below, from the
March 15 or September 15, as the case may be, to which interest
on Securities has been paid preceding the date hereof (unless the
date hereof is a March 15 or a September 15 to which interest has
been paid, in which case from the date hereof, or unless the date
hereof is prior to the first scheduled payment of interest on
September 15, 1998, in which case from February 10, 1998) until
payment of said principal sum has been made or duly provided for.
The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day
months. If the Company shall default in the payment of interest
when due on such March 15 or September 15, then this Security
shall bear interest from the next preceding date to which
interest has been paid, or, if no interest has been paid, from
February 10, 1998. The interest so payable on any March 15 or
September 15 shall be paid to the person in whose name this
Security shall be registered at the close of business on the
fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date (each, a
"Regular Record Date"). For purposes of this Security, "Business
Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in The City of New York are authorized
or obligated by law, executive order or governmental decree to be
closed.
____________
"Dealer remarketable security" and "Drs." are service marks
of J.P. Morgan Securities Inc.
<PAGE>
Payments of interest (other than interest payable at
maturity) on this Security will be made (except as specified
below) by wire-transfer in same-day funds to the registered
holder appearing on the Securities register on the relevant
Regular Record Date. Principal and interest at maturity will be
paid upon surrender of this Security at the office of the paying
agent located at 55 Water Street, 2nd Floor, North Building, Room
234, New York, New York, or at such other paying agency as the
Company may designate.
Initially, The Chase Manhattan Bank will be the paying agent
and the registrar for this Security. The Company reserves the
right at any time to remove any paying agent or registrar without
notice, to appoint additional or other paying agents and other
Security registrars without notice and to approve any change in
the office through which any paying agent or Security registrar
acts; provided, however, that there will at all times be a paying
agent in New York City.
If and to the extent the Company shall default in the
payment of the interest due on any interest payment date, such
defaulted interest shall be paid to the person in whose name this
Security is registered at the close of business on a record date
established for such payment by notice by or on behalf of the
Company to the holders of the Securities mailed by first-class
mail not less than fifteen days prior to such record date to
their last address as they shall appear upon the Security
register, such record date to be not less than five days
preceding the date of payment of such defaulted interest. The
Company may pay interest by check mailed to the holder's address
as it appears on the Security register.
This Security and all the obligations of the Company
hereunder are direct, unsecured obligations of the Company and
rank pari passu with all other Securities and other unsecured and
unsubordinated indebtedness of the Company from time to time
outstanding.
The rate of interest on this Security shall be 5-3/4% per annum
to March 15, 2001 (the "Remarketing Date"). If the Remarketing
Dealer elects to remarket the Securities pursuant to the
Remarketing Agreement dated as of February 10, 1998 (the
"Remarketing Agreement") between J.P. Morgan Securities Inc., as
Remarketing Dealer (the "Remarketing Dealer"), and the Company,
then, except as otherwise set forth on the reverse hereof, (i)
this Security shall be subject to mandatory tender to the
Remarketing Dealer for remarketing on the Remarketing Date, on
the terms and subject to the conditions set forth on the reverse
hereof, and (ii) on and after the Remarketing Date, this Security
shall bear interest at the rate determined by the Remarketing
Dealer in accordance with the procedures set forth in Section 4
on the reverse hereof (the "Interest Rate to Maturity").
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof and such further
provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Security shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall
have been executed by the Trustee under the Indenture referred to
on the reverse hereof.
IN WITNESS WHEREOF, AlliedSignal Inc. has caused this
Security to be signed by its duly authorized officers and has
caused its corporate seal to be affixed hereunto.
Dated: February 10, 1998
ALLIEDSIGNAL INC.
By: ______________________
Name: John W. Gamble, Jr.
Title: Assistant Treasurer
(SEAL)
ATTEST:
By:__________________________
Name: Terrance L. Carlson
Title: Assistant Secretary
Certificate of Authentication
This is one of the Securities of the series designated therein and
described in the within mentioned Indenture.
THE CHASE MANHATTAN BANK
(NEW YORK BANKING CORPORATION),
as Trustee
By:______________________________
Authorized Signatory
<PAGE>
AlliedSignal Inc.
5-3/4% Dealer remarketable security ("Drs. ")
due March 15, 2011
1. Indenture. (a) This Security is one of the duly
authorized issue of debt securities of the Company (herein
referred to as the "Debt Securities") of the series hereinafter
specified, all issued or to be issued under and pursuant to an
indenture dated as of October 1, 1985, as supplemented by the
First Supplemental Indenture dated as of February 1, 1991 and the
Second Supplemental Indenture dated as of November 1, 1997
(herein referred to as the "Indenture"), duly executed and
delivered by the Company to The Chase Manhattan Bank, as Trustee
(herein referred to as the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders (the words "holders", "holder", "Securityholders" or
"Securityholder" mean the registered holder(s)) of the Debt
Securities.
(b) The Debt Securities may be issued in one or more
series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear
interest, if any, at different rates, may be denominated in
different currencies, may be subject to different redemption
provisions, if any, may be subject to different sinking funds, if
any, may be subject to additional covenants and Events of Default
and may otherwise vary as provided in the Indenture. This
Security is one of the series designated as the 5-3/4% Dealer
remarketable securities ("Drs. ") due March 15, 2011 of the
Company and such series is limited in aggregate principal amount
to $200,000,000. References herein to "Securities" or "Drs."
shall mean the Debt Securities of said series.
(c) All capitalized terms used in this Security which are
defined in the Indenture and not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
2. Mandatory Tender on Remarketing Date; Purchase and
Settlement. On a Business Day not later than five Business Days
prior to the Remarketing Date (the "Notification Date"), the
Remarketing Dealer will notify the Company and the Trustee as to
whether it elects to purchase the Drs. on the Remarketing Date.
If, and only if, the Remarketing Dealer so elects, the Drs. shall
be subject to mandatory tender to the Remarketing Dealer for
purchase and remarketing on the Remarketing Date, upon the terms
and subject to the conditions described in the Remarketing
Agreement. The purchase price of the Drs. shall be equal to 100%
of the principal amount thereof. Upon such tender, the
Remarketing Dealer shall have the option, in its sole discretion,
to elect to remarket the Securities in accordance with the
Remarketing Agreement for its own account at varying prices to be
determined by the Remarketing Dealer at the time of each sale. No
holder or beneficial owner of any Securities shall have any
rights or claims under the Remarketing Agreement or against the
Company or the Remarketing Dealer as a result of the Remarketing
Dealer not purchasing such Securities.
3. Maintenance of Book-Entry System. (a) The tender and
settlement procedures with respect to the Securities set forth in
the Remarketing Agreement shall be subject to modification,
without the consent of the holders of the Securities, to the
extent required by DTC or, if the book-entry system is no longer
available for the Securities at the time of the remarketing, to
the extent required to facilitate the tendering and remarketing
of Securities in certificated form. In addition, the Remarketing
Dealer may modify the settlement procedures without the consent
of the holders of the Securities in order to facilitate the
settlement process.
(b) The Company hereby agrees with the Trustee and the
holders of Securities that at all times, notwithstanding any
provision to the contrary set forth in the Indenture, (i) it will
use its best efforts to maintain the Securities in book-entry
form with DTC or any successor thereto and to appoint a successor
depository to the extent necessary to maintain the Securities in
book-entry form and (ii) it will waive any discretionary right
that it otherwise may have under the Indenture to cause the
Securities to be issued in certificated form.
4. Determination of Interest Rate to Maturity;
Notification Thereof. The Remarketing Dealer shall determine a
new stated interest rate on the Drs. as of the Remarketing Date
(the "Interest Rate to Maturity") on the third Business Day
immediately preceding the Remarketing Date (the "Determination
Date") by soliciting by 3:30 p.m., New York City time the
Reference Corporate Dealers (defined below) for firm committed
bids to purchase all outstanding Drs. at the Dollar Price
(defined below), and by selecting the lowest such firm committed
bid (regardless of whether each of the Reference Corporate
Dealers actually submit bids). Each bid shall be expressed in
terms of the Interest Rate to Maturity that the Drs. would bear
(quoted as a spread over 5.50% per annum (the "Base Rate")) based
on the following assumptions: (i) the Drs. would be issued on the
Remarketing Date for settlement on the same day; (ii) the Drs.
would mature on the Stated Maturity Date; (iii) the Drs. would
bear interest from the Remarketing Date at a stated rate equal to
the Interest Rate to Maturity bid by such Reference Corporate
Dealer, payable semi-annually on the interest payment dates for
the Drs. and (iv) the winning bidder will bear all of its own
expenses (including legal fees) in connection with the
remarketing. The Interest Rate to Maturity announced by the
Remarketing Dealer as a result of such process will be quoted to
the nearest one hundred-thousandth (0.00001) of one percent per
annum and, absent manifest error, will be binding and conclusive
upon holders of the Drs., the Company and the Trustee. The
Remarketing Dealer shall have the discretion to select the time
at which the Comparable Treasury Price is determined on the
Determination Date.
"Dollar Price" means the discounted present value to the
Remarketing Date of the cash flows on a bond (x) with a principal
amount equal to the aggregate principal amount of the Drs., (y)
maturing on the Stated Maturity Date and (z) bearing interest
from the Remarketing Date, payable semi-annually (assuming a
360-day year consisting of twelve 30-day months) on the interest
payment dates of the Drs. at a rate equal to the Base Rate, using
a discount rate equal to the Treasury Rate (defined below).
"Reference Corporate Dealer" means J.P. Morgan Securities
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and two other leading dealers of publicly-traded
debt securities of the Company to be chosen by the Remarketing
Dealer. If any of such persons shall cease to be a leading
dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may replace such person with any other
leading dealer of publicly-traded debt securities of the Company.
"Treasury Rate" means the annual rate equal to the semi-
annual equivalent yield to maturity or interpolated (on a 30/360
day count basis) yield to maturity on the Determination Date of
the Comparable Treasury Issues (defined below) for value on the
Remarketing Date, assuming a price for the Comparable Treasury
Issues (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price (as defined below).
"Comparable Treasury Issues" means the United States
Treasury security or securities selected by the Remarketing
Dealer as having an actual or interpolated maturity or maturities
comparable to the remaining term of the Drs.
"Comparable Treasury Price" means (a) the offer prices for
the Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) on the Determination Date, as
set forth on Telerate Page 500 (as defined below), adjusted to
reflect settlement on the Remarketing Date if prices quoted on
Telerate Page 500 are for settlement on any date other than the
Remarketing Date, or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such
Business Day, (i) the average of five Reference Treasury Dealer
Quotations for such Remarketing Date, after excluding the highest
and lowest of such Reference Treasury Dealer Quotations, or (ii)
if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. "Telerate Page 500" means the
display designated as "Telerate Page 500" on Dow Jones Markets
Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices
specified in (a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer, the offer price(s) for the
Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) for settlement on the
Remarketing Date, quoted in writing to the Remarketing Dealer by
such Reference Treasury Dealer by 3:30 p.m. on the Determination
Date.
"Reference Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York (which may include the
Remarketing Dealer) selected by the Remarketing Dealer.
5. Repurchase. If the Remarketing Dealer (i) does not
elect to exercise its right to a mandatory tender of the Drs.,
(ii) shall not have received by the required time on the
Determination Date any firm, committed bids to purchase all of
the Drs. in accordance with Section 4 of this Security or (iii)
for any other reason does not purchase all of the Drs. on the
Remarketing Date, then the Company shall repurchase on the
Remarketing Date at a price equal to 100% of the principal amount
of the Drs. plus all accrued interest, if any, on the Drs. to
(but excluding) the Remarketing Date, any Drs. that have not been
purchased by the Remarketing Dealer on the Remarketing Date.
6. Redemption.
(a) If the Remarketing Dealer has elected to remarket the
Drs. on the Remarketing Date, the Company shall have the right to
redeem the Drs., in whole but not in part, from the Remarketing
Dealer on the Remarketing Date at a redemption price equal to the
greater of (i) 100% of the principal amount thereof or (ii) the
Dollar Price, by giving notice of such redemption to the
Remarketing Dealer no later than
(x) the Business Day immediately prior to the
Determination Date or
(y) if fewer than three Reference Corporate Dealers
submit firm, committed bids to the Remarketing Dealer on the
Determination Date in accordance with Section 4 of this
Security, immediately after the deadline set by the
Remarketing Dealer for receiving such bids has passed.
In either such case, it shall pay such redemption price for the
Drs. in same-day funds by wire transfer on the Remarketing Date
to an account designated by the Remarketing Dealer.
(b) After the Remarketing Date, the Drs. will be redeemable
(a "Post-Remarketing Redemption"), in whole or in part, at the
option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Drs. or
(ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including the
portion of any such payments of interest accrued as of the
redemption date) discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-
day months) at the Adjusted Treasury Rate (as defined below)
(determined on the third Business Day preceding such redemption
date), plus, in each case, accrued and unpaid interest thereon to
the redemption date.
Notice of any Post-Remarketing Redemption will be mailed at
least 30 days but not more than 60 days before the redemption
date to each holder of the Drs. to be redeemed. Unless the
Company defaults in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Drs. or
portions thereof called in connection with a Post-Remarketing
Redemption.
"Adjusted Treasury Rate" means (i) the arithmetic mean of
the yields under the heading "Week Ending" published in the
Statistical Release most recently published prior to the date of
determination under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to
the remaining life to maturity, as of the redemption date, of the
principal being redeemed plus (ii) 0.10%. If no maturity set
forth under such heading exactly corresponds to the maturity of
such principal, yields for the two published maturities most
closely corresponding to the maturity of such principal shall be
calculated pursuant to the immediately preceding sentence, and
the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding in each of
the relevant periods to the nearest month.
"Statistical Release" means the statistical release
designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve System and which
establishes yields on actively-traded United States government
securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any
determination under the terms of the Drs., then such other
reasonably comparable index which shall be designated by the
Company.
7. Effect of Event of Default. If an Event of Default
shall have occurred and be continuing, the principal hereof may
be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
8 Tax Treatment. The Company and the holders of this
Security (and each holder of a beneficial interest herein), by
accepting this Security, agree to treat the Drs. as fixed rate
debt instruments that mature on the Remarketing Date for United
States Federal income tax purposes.
9. Amendments and Waivers. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and
the rights of holders of Debt Securities of each series under the
Indenture at any time by the Company and the Trustee with the
consent of the holders of a majority in aggregate principal
amount of the Debt Securities at the time outstanding of each
series to be affected thereby (voting as a class). The Indenture
also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debt Securities of each series
to be affected at the time outstanding, on behalf of the holders
of all Debt Securities of each such series, to waive compliance
by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Security shall
be conclusive and binding upon such holder and upon all future
holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
10. Denominations, Transfer and Exchange. (a) The
Securities are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
(b) Where certificated Securities are presented to the
registrar with a request to register their transfer or to
exchange them for an equal principal amount of Securities of
other authorized denominations, the registrar shall register the
transfer or make the exchange if its requirements for such
transactions are met. No service charge shall be made for any
registration of transfer or exchange of Securities, but the
Company may require the payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
(c) Ownership of Securities shall be governed by the
register for the Securities kept by the registrar. The Company,
the Trustee and any agent of the Company may treat the person in
whose name a Security is registered as the absolute owner thereof
for all purposes.
11. No Liability of Certain Persons. No director, officer,
employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under this Security
or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each holder by
accepting this Security waives and releases all such liability.
The waiver and release are part of the consideration for the
issue of the Security.
12. Governing Law. The laws of the State of New York
govern the Indenture and this Security.
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfers(s) unto:
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
- -----------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NUMBER AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Security of AlliedSignal Inc. and all rights thereunder and hereby
irrevocably constitutes and appoints ____________________________ attorney to
transfer said Security on the books of the Company, with full power of
substitution in the premises
Dated:
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. THE SIGNATURE (S) SHOULD
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY, A MEMBER ORGANIZATION
OR A NATIONAL STOCK EXCHANGE OR BY SUCH OTHER ENTITY WHOSE SIGNATURE IS ON
FILE WITH AND ACCEPTABLE TO THE TRANSFER AGENT.
<PAGE> REMARKETING AGREEMENT
REMARKETING AGREEMENT dated as of February 10, 1998 (the
"Remarketing Agreement") between AlliedSignal Inc., a Delaware
corporation (the "Company"), and J.P. Morgan Securities Inc.
("JPMSI" and, in its capacity as the remarketing dealer hereunder,
the "Remarketing Dealer").
WHEREAS, the Company has issued $200,000,000 aggregate
principal amount of its 5-3/4% Dealer remarketable securitiesSM*
"Dealer remarketable securities " and "Drs. " are service
marks of J.P. Morgan Securities Inc. Due March 15, 2011 ("Drs." )
pursuant to an Indenture dated as of October 1, 1985, as
supplemented (the "Indenture"), between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"); and
WHEREAS, the Drs. are being sold initially pursuant to an
Underwriting Agreement dated February 5, 1998 (the "Underwriting
Agreement") between the Company and JPMSI, Goldman, Sachs & Co.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriters"); and
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement
(No. 33-64245) under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the offering of debt
securities, including the Drs., which registration statement was
declared effective by order of the Commission, and has filed such
amendments thereto and such amended or supplemented prospectuses
as may have been required to the date hereof, and will file such
additional amendments and supplements thereto and such additional
amended or supplemented prospectuses as may hereafter be required
(such registration statement, including any amendments and
supplements thereto, and all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act, or otherwise, are referred to herein
as the "Registration Statement"); all preliminary and final
prospectuses relating to such Registration Statement used in
connection with the offering of Drs., including the documents
incorporated by reference therein, are referred to herein
collectively as the "Prospectus"; provided that, if any revised
prospectus shall be provided to the Remarketing Dealer by the
Company for use in connection with the remarketing of the Drs.
which differs from the Prospectus filed with the Commission at
the time of the initial issuance of the Drs. (whether or not such
revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) under the Securities Act), the term
"Prospectus" shall refer to such revised prospectus from and
after the time it is first provided to the Remarketing Dealer for
such use; and
WHEREAS, JPMSI is prepared to act as the Remarketing Dealer
with respect to the remarketing of the Drs. on March 15, 2001
(the "Remarketing Date") pursuant to the terms of, but subject to
the conditions set forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the
parties hereto agree as follows:
Section 1 . Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to
them in the Indenture and the form of the Drs.
Section 2. Representations and Warranties. The Company
represents and warrants to the Remarketing Dealer as of the date
hereof, the Notification Date (as defined below), the
Determination Date (as defined below) and the Remarketing Date
(each of the foregoing dates being hereinafter referred to as a
"Representation Date"), as follows:
(i) It has filed all reports and any definitive proxy or
information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act (collectively, the "Exchange Act Documents").
(ii) The applicable Remarketing Materials (as defined
below) will not, as of their date or the Remarketing Date,
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) The representations and warranties contained
in the Underwriting Agreement are true and correct with the same
force and effect as though expressly made at and as of the
Representation Date.
(iv) The Company's authorized equity capitalization is
as set forth in the Exchange Act Documents; the Drs. conform to
the description thereof contained in the Prospectus.
(v) Each of the Company and each subsidiary of the
Company that is a "significant subsidiary" as defined in Rule 405
of Regulation C promulgated under the Securities Act (each a
"Significant Subsidiary" and collectively the "Significant
Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct
its business as described in the Exchange Act Documents, and is
duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material properties
or conducts material business.
(vi) All the outstanding shares of capital stock of
each Significant Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Exchange Act Documents, all
outstanding shares of capital stock of the Significant
Subsidiaries (except for directors' qualifying shares) are owned
by the Company either directly or through wholly-owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances.
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
(viii) The Indenture has been duly authorized,
executed and delivered; the Indenture has been duly qualified
under the Trust Indenture Act; the Indenture constitutes a valid
and legally binding instrument enforceable against the Company in
accordance with its terms, except that such enforcement may be
subject to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
and general principles of equity from time to time in effect; and
the Drs. have been duly authorized and constitute valid and
legally binding obligations of the Company entitled to the
benefits of the Indenture.
(ix) There is no pending or, to the best knowledge of
senior officers of the Company, threatened action, suit or
proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in the
Exchange Act Documents which is not adequately disclosed in the
Exchange Act Documents, and there is no franchise, contract or
other document of a character required to be described in the
Exchange Act Documents, or to be filed as an exhibit thereto,
which is not described or filed as required; and the statements
included or incorporated in the Exchange Act Documents describing
any legal proceedings or material contracts or agreements
relating to the Company and its subsidiaries fairly summarize the
matters therein described.
(x) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the remarketing of the Drs. by the Remarketing
Dealer and such other approvals as have been obtained.
(xi) Neither this Agreement, nor the consummation of
the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation
of, or constitute a default under the certificate of
incorporation or by-laws of the Company or the terms of any
indenture or other agreement or instrument to which the Company
or any of its Significant Subsidiaries is a party or bound, or
any order of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its Significant Subsidiaries.
Section 3. Covenants of the Company. The Company covenants
with the Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone,
confirmed in writing (which may include facsimile or other
electronic transmission), to the Remarketing Dealer of the
occurrence (x) at any time of any event set forth in clause (ii),
(v) or (vi) of subsection 8(c) hereof and (y) on or after the
Notification Date, of any other event set forth in clause (i),
(iii)(a) or (vii) of subsection 8(c) hereof.
( b) The Company will furnish to the Remarketing Dealer
upon request:
(i) each Registration Statement and the Prospectus relating
to the Drs. (including in each case any amendment or supplement
thereto and each document incorporated therein by reference),
other than Exchange Act Documents publicly available on the
Commission's internet website, and
(ii) in connection with the remarketing of Drs., such
other publicly available written information as the Remarketing
Dealer may reasonably request from time to time, other than
Exchange Act Documents publicly available on the Commission's
internet website.
The Company agrees to provide the Remarketing Dealer with as
many copies of the foregoing written materials and other
Company-approved information as the Remarketing Dealer may
reasonably request for use in connection with the remarketing of
Drs. and consents to the use thereof for such purpose.
(a) If, at any time during which the Remarketing Dealer would
be obligated to take any action under this Agreement, any event
or condition known to the Company relating to or affecting the
Company, any subsidiary thereof or the Drs. shall occur which
could reasonably be expected to cause any of the reports,
documents, materials or information referred to in paragraph (b)
above, any Exchange Act Documents, or any document incorporated
therein by reference (collectively, the "Remarketing Materials")
to contain an untrue statement of a material fact or omit to
state a material fact, the Company shall promptly notify the
Remarketing Dealer in writing of the circumstances and details of
such event or condition.
(b) So long as the Drs. are outstanding, the Company
will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by
the Exchange Act and the rules and regulations thereunder.
(c) The Company will comply with the Securities Act,
the Exchange Act, the Trust Indenture Act and the rules and
regulations of the Commission thereunder so as to permit the
completion of the remarketing of the Drs. as contemplated in this
Agreement, in the Prospectus first used to confirm sales of the
Drs. when the Drs. were originally issued, and in the prospectus,
if any, used in connection with the remarketing.
(d) If at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of
the Drs., any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of
counsel for the Remarketing Dealer or for the Company, to amend
the Registration Statement or amend or supplement any Prospectus
in order that such Prospectus will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to file a new
registration statement or issue a new prospectus in order to
comply with the requirements of the Securities Act or the rules,
regulations or interpretations of the Commission thereunder, the
Company, at its expense, will promptly:
(i) prepare and file with the Commission such amendment or
supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus
comply with such requirements, or prepare and file any such new
registration statement and prospectus as may be necessary for
such purpose,
(ii) furnish to the Remarketing Dealer such number of
copies of such amendment, supplement or other document as the
Remarketing Dealer may reasonably request;
(iii) furnish to the Remarketing Dealer an
officers' certificate, an opinion, including a statement as to
the absence of material misstatements in or omissions from the
Registration Statement and the Prospectus, as amended or
supplemented, of the General Counsel, a Deputy General Counsel or
a Senior Counsel, Corporate and Finance of the Company reasonably
satisfactory to the Remarketing Dealer and a "comfort letter"
from the Company's independent accountants, in each case in form
and substance satisfactory to the Remarketing Dealer, of the same
tenor as the officers' certificate, opinion and comfort letter,
respectively, delivered pursuant to the Underwriting Agreement,
but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date thereof or such
new registration statement and prospectus; and
(iv) provide to the Remarketing Dealer and any other
securities dealer participating in the remarketing of the Drs.
the opportunity to conduct an underwriters' due diligence
investigation of the Company in a scope customarily provided in
connection with a public offering of the Company's debt
securities.
(e) The Company agrees that neither it nor any of its
subsidiaries or affiliates shall purchase or otherwise acquire,
or enter into any agreement to purchase or otherwise acquire, any
of the Drs. prior to the remarketing thereof by the Remarketing
Dealer, other than a repurchase of the Drs. in accordance with
subsection 4(g) or a redemption of the Drs. in accordance with
subsection 4(h) of this Agreement.
(f) The Company will comply with each of the covenants
set forth in the Underwriting Agreement.
(g) In connection with the remarketing, the Company
will arrange for the qualification of the Drs. for sale under the
laws of such jurisdictions as the Remarketing Dealer may
designate, and will maintain such qualifications in effect so
long as required for the remarketing of the Drs.; the Company
will pay all expenses in connection with such qualification,
including the fees and disbursements of counsel for any dealers
participating in the remarketing in connection with such
qualification and in connection with blue sky and legal
investment surveys.
(h) During the five Business Day period ending on the
Remarketing Date, the Company will not, without the consent of
the Remarketing Dealer, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the
offering of, any debt securities or warrants covered by the
Registration Statement or any other registration statement filed
under the Securities Act.
Section 4. Appointment and Obligations of the Remarketing
Dealer.
(i) Unless this Agreement is otherwise terminated in
accordance with Section 10 hereof, in accordance with the terms,
but subject to the conditions, of this Agreement, the Company
hereby appoints JPMSI, and JPMSI hereby accepts such appointment,
as the exclusive Remarketing Dealer with respect to the Drs.,
subject further to repurchase of the Drs. in accordance with
subsection 4(g) or redemption of the Drs. in accordance with
subsection 4(h).
(j) The obligations of the Remarketing Dealer hereunder to
repurchase the Drs. for remarketing on the Remarketing Date are
conditioned on (i) the issuance and delivery of such Drs.
pursuant to the terms and conditions of the Underwriting
Agreement and (ii) the Remarketing Dealer's election on the
Notification Date to purchase the Drs. for remarketing on the
Remarketing Date. If the Remarketing Dealer has elected to
remarket the Drs. pursuant to subsection 4(c), the Remarketing
Dealer shall not be obligated to set the Interest Rate to
Maturity (as defined below) on any Drs., to remarket any Drs. or
to perform any of the other duties set forth herein at any time
after the Notification Date that (i) any of the conditions set
forth in subsection 8(a) or 8(b) hereof shall not have been fully
and completely met to the satisfaction of the Remarketing Dealer,
or (ii) any of the events set forth in subsection 8(c) hereof
shall have occurred.
(k) On a Business Day not later than five Business
Days prior to the Remarketing Date (the "Notification Date"), the
Remarketing Dealer will notify the Company and the Trustee as to
whether it elects to purchase the Drs. on the Remarketing Date.
If, and only if, the Remarketing Dealer so elects, the Drs. shall
be subject to mandatory tender to the Remarketing Dealer for
purchase and remarketing on the Remarketing Date, upon the terms
and subject to the conditions described herein. The purchase
price of the Drs. shall be equal to 100% of the principal amount
thereof.
(l) The Remarketing Dealer shall determine a new
stated interest rate on the Drs. as of the Remarketing Date (the
"Interest Rate to Maturity") on the third Business Day
immediately preceding the Remarketing Date (the "Determination
Date") by soliciting by 3:30 p.m., New York City time, the
Reference Corporate Dealers (defined below) for firm committed
bids to purchase all outstanding Drs. at the Dollar Price
(defined below), and by selecting the lowest such firm committed
bid (regardless of whether each of the Reference Corporate
Dealers actually submit bids). Each bid shall be expressed in
terms of the Interest Rate to Maturity that the Drs. would bear
(quoted as a spread over 5.50% per annum (the "Base Rate")) based
on the following assumptions: (i) the Drs. would be issued on the
Remarketing Date for settlement on the same day; (ii) the Drs.
would mature on the Stated Maturity Date; (iii) the Drs. would
bear interest from the Remarketing Date at a stated rate equal to
the Interest Rate to Maturity bid by such Reference Corporate
Dealer, payable semi-annually on the interest payment dates for
the Drs. and (iv) the winning bidder will bear all of its own
expenses (including legal fees) in connection with the
remarketing. The Interest Rate to Maturity announced by the
Remarketing Dealer as a result of such process will be quoted to
the nearest one hundred-thousandth (0.00001) of one percent per
annum and, absent manifest error, will be binding and conclusive
upon holders of the Drs., the Company and the Trustee. The
Remarketing Dealer shall have the discretion to select the time
at which the Comparable Treasury Price is determined on the
Determination Date.
"Dollar Price" means the discounted present value to the
Remarketing Date of the cash flows on a bond (x) with a principal
amount equal to the aggregate principal amount of the Drs., (y)
maturing on the Stated Maturity Date and (z) bearing interest
from the Remarketing Date, payable semi-annually (assuming a
360-day year consisting of twelve 30-day months) on the interest
payment dates of the Drs. at a rate equal to the Base Rate, using
a discount rate equal to the Treasury Rate (defined below).
"Reference Corporate Dealer" means J.P. Morgan Securities
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and two other leading dealers of publicly-traded
debt securities of the Company to be chosen by the Remarketing
Dealer. If any of such persons shall cease to be a leading
dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may replace such person with any other
leading dealer of publicly-traded debt securities of the Company.
"Treasury Rate" means the annual rate equal to the semi-
annual equivalent yield to maturity or interpolated (on a 30/360
day count basis) yield to maturity on the Determination Date of
the Comparable Treasury Issues (defined below) for value on the
Remarketing Date, assuming a price for the Comparable Treasury
Issues (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price (as defined below).
"Comparable Treasury Issues" means the United States
Treasury security or securities selected by the Remarketing
Dealer as having an actual or interpolated maturity or maturities
on the Determination Date comparable to the remaining term of the
Drs.
"Comparable Treasury Price" means (a) the offer prices for
the Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) on the Determination Date, as
set forth on Telerate Page 500 (as defined below), adjusted to
reflect settlement on the Remarketing Date if prices quoted on
Telerate Page 500 are for settlement on any date other than the
Remarketing Date, or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such
Business Day, (i) the average of five Reference Treasury Dealer
Quotations for such Remarketing Date, after excluding the highest
and lowest of such Reference Treasury Dealer Quotations, or (ii)
if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. "Telerate Page 500" means the
display designated as "Telerate Page 500" on Dow Jones Markets
Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices
specified in (a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer, the offer price(s) for the
Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) for settlement on the
Remarketing Date, quoted in writing to the Remarketing Dealer by
such Reference Treasury Dealer by 3:30 p.m. on the Determination
Date.
"Reference Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York (which may include the
Remarketing Dealer) selected by the Remarketing Dealer.
(a) If the Remarketing Dealer has elected to remarket the
Drs. as provided in subsections 4(c) and 4(d), then it shall
notify the Company, the Trustee and The Depository Trust Company
("DTC") by telephone, confirmed in writing (which may include
facsimile or other electronic transmission), by 5:00 p.m., New
York City time, on the Determination Date of the Interest Rate to
Maturity applicable to the Drs. effective from and including the
Remarketing Date.
(b) If the Drs. are remarketed as provided herein, the
Remarketing Dealer will make, or cause the Trustee to make,
payment to DTC by the close of business on the Remarketing Date
against delivery through DTC of the Drs., of the purchase price
for all of the Drs. The purchase price of the Drs. will be equal
to 100% of the principal amount thereof.
(i) If the Remarketing Dealer does not elect to purchase the
Drs. for remarketing pursuant to subsection 4(c) of this
Agreement, (ii) shall not have received by the required time on
the Determination Date any firm, committed bids to purchase all
of the Drs. in accordance with subsection 4(d) of this Agreement
or (iii) for any other reason does not purchase all of the Drs.
on the Remarketing Date, then the Company shall repurchase on the
Remarketing Date any Drs. that have not been purchased by the
Remarketing Dealer at a price equal to 100% of the principal
amount of the Drs. plus all accrued interest, if any, on the Drs.
to (but excluding) the Remarketing Date.
(c) If the Remarketing Dealer has elected to remarket the
Drs. on the Remarketing Date in accordance with subsection 4(c)
hereof, the Company may irrevocably elect to exercise its right
to redeem the Drs., in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the greater of (x)
100% of the aggregate principal amount of the Drs. and (y) the
Dollar Price, by giving notice of such election to the
Remarketing Dealer no later than
(i) the Business Day immediately prior to the Determination
Date or
(ii) if fewer than three Reference Corporate Dealers
submit firm, committed bids in accordance with subsection 4(d)
hereof, immediately after the deadline set by the Remarketing
Dealer for receiving such bids has passed.
In either such case, the Company shall pay such redemption price
for the Drs. in same-day funds by wire transfer on the
Remarketing Date to an account designated by the Remarketing
Dealer.
If the Company exercises its right to redeem the Drs.
pursuant to clause (ii) above, it shall promptly reimburse the
Remarketing Dealer for any and all expenses (including any and
all hedge losses) incurred by the Remarketing Dealer in
connection with its having to break associated hedging
transactions to enable the Company to exercise such redemption
right. If any such broken hedges result in a profit to the
Remarketing Dealer, the Remarketing Dealer shall promptly pay
such profit over to the Company. The amount of any hedge losses
or profits shall be determined solely by the Remarketing Dealer,
on a reasonable basis.
(a) In accordance with the terms and provisions of the Drs.,
the tender and settlement procedures set forth in this Section 4,
shall be subject to modification without the consent of the
holders of the Drs., to the extent required by DTC or, if the
book-entry system is no longer available for the Drs. at the time
of the remarketing, to the extent required to facilitate the
tendering and remarketing of Drs. in certificated form. In
addition, the Remarketing Dealer may, without the consent of the
holders of the Drs., modify the settlement procedures set forth
in the Indenture and/or the Drs. in order to facilitate the
settlement process.
(b) In accordance with the terms and provisions of the
Drs., the Company hereby agrees that at all times,
notwithstanding any provision to the contrary set forth in the
Indenture, (i) it will use its best efforts to maintain the Drs.
in book-entry form with DTC or any successor thereto and to
appoint a successor depository to the extent necessary to
maintain the Drs. in book-entry form and (ii) it will waive any
discretionary right it otherwise may have under the Indenture to
cause the Drs. to be issued in certificated form.
Section 5 . Fees and Expenses. Subject to Section 10 of this
Agreement, the Remarketing Dealer will not receive any fees or
reimbursement of expenses from the Company for its remarketing
services set forth herein.
Section 6. Resignation of the Remarketing Dealer. The
Remarketing Dealer may resign and be discharged from its duties
and obligations hereunder at any time, such resignation to be
effective 10 Business Days after delivery of a written notice to
the Company and the Trustee of such resignation. The Remarketing
Dealer also may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be
effective immediately, upon termination of this Agreement in
accordance with subsection 10(b) hereof. The Company shall have
the right, but not the obligation, to appoint a successor
Remarketing Dealer.
Section 7. Dealing in the Drs.; Purchase of Drs. by the
Company. JPMSI, when acting as the Remarketing Dealer or in its
individual or any other capacity, may, to the extent permitted by
law, buy, sell, hold and deal in any of the Drs. JPMSI, as
holder or beneficial owner of the Drs., may exercise any vote or
join as a holder or beneficial owner, as the case may be, in any
action which any holder or beneficial owner of Drs. may be
entitled to exercise or take pursuant to the Indenture with like
effect as if it did not act in any capacity hereunder. The
Remarketing Dealer, in its capacity either as principal or agent,
may also engage in or have an interest in any financial or other
transaction with the Company as freely as if it did not act in
any capacity hereunder.
(b) The Company may purchase Drs. in the remarketing,
provided that the Interest Rate to Maturity established with
respect to Drs. in the remarketing is not different from the
Interest Rate to Maturity that would have been established if the
Company had not purchased such Drs.
Section 8. Conditions to Remarketing Dealer's Obligations.
The obligations of the Remarketing Dealer under this Agreement
have been undertaken in reliance on, and shall be subject to, the
following:
(a) the due performance in all material respects by the
Company of its obligations and agreements as set forth in this
Agreement and the accuracy of the representations and warranties
in this Agreement and any certificate delivered pursuant hereto;
(b) the due performance in all material respects by
the Company of its obligations and agreements set forth in, and
the accuracy in all material respects as of the dates specified
therein of the representations and warranties contained in, the
Underwriting Agreement;
(c) none of the following events shall have occurred
after the Remarketing Dealer elects on the Notification Date to
remarket the Drs.:
(i) there shall have occurred any decrease in the rating of
any of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice
shall have been given of any intended or potential decrease in
any such rating or of a possible change in any such rating that
does not indicate the direction of the possible change;
(ii) without the prior written consent of the
Remarketing Dealer, the Indenture (including the Drs.) shall have
been amended in any manner, or otherwise contain any provision
not contained therein as of the date hereof, that in either case
in the judgment of the Remarketing Dealer materially changes the
nature of the Drs. or the remarketing procedures;
(iii) (a) trading in the Company's common stock
shall have been suspended by the Commission or the New York Stock
Exchange or (b) trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, or a banking
moratorium shall have been declared either by Federal or New York
State authorities;
(iv) there shall have occurred any outbreak or material
escalation of major hostilities in which the United States is
involved, or a declaration of war by the Congress of the United
States, or other substantial national or international calamity
or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Remarketing Dealer, impracticable or inadvisable to proceed with
the remarketing of the Drs. or the delivery of the Drs. to
investors after the remarketing;
(v) an Event of Default (as defined in the Indenture),
or any event which, with the giving of notice or passage of time,
or both, would constitute an Event of Default, with respect to
the Drs. shall have occurred and be continuing;
(vi) an Event of Default (as defined in the ISDA Master
Agreement dated as of February 12, 1997 (the "Master Agreement")
between Morgan Guaranty Trust Company of New York and the
Company), shall have occurred and be continuing under the Master
Agreement (if the Master Agreement shall have terminated, then
this provision shall continue to have effect as if such agreement
were still in force and effect);
(vii) (a) any change or decrease specified in any
comfort letter referred to in subsection 3(f) of this Agreement
dated after the Notification Date or (b) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its Significant
Subsidiaries shall have occurred since the Notification Date, the
effect of which, in any case specified in clause (a) or (b)
above, is, in the judgment of the Remarketing Dealer, so material
and adverse as to make it impractical or inadvisable to proceed
with the remarketing of the Drs. or the delivery of the Drs. to
investors after the remarketing;
(viii) the Treasury Rate used to determine the
Dollar Price on the Determination Date exceeds the Base Rate;
(ix) the Remarketing Dealer shall not have received by
the required time on the Determination Date any firm, committed
bids to purchase all of the Drs. in accordance with subsection
4(d) hereof; or
(x) if a prospectus is required under the Securities
Act to be delivered in connection with the remarketing of the
Drs., the Company shall fail to furnish to the Remarketing Dealer
on the Remarketing Date the officers' certificate, opinion and
comfort letter referred to in subsection 3(f) of this Agreement
and such other documents and opinions as counsel for the
Remarketing Dealer may reasonably require for the purpose of
enabling such counsel to pass upon the sale of Drs. in the
remarketing as herein contemplated and related proceedings, or in
order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and
(d) the Remarketing Dealer shall have received on the
Remarketing Date a certificate of any of the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, or the
Controller of the Company, satisfactory to the Remarketing
Dealer, dated as of the Remarketing Date, to the effect that (w)
the representations and warranties in this Agreement are true and
correct with the same force and effect as though expressly made
at and as of the Remarketing Date, (x) the Company has complied
with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Remarketing Date,
(y) since the date of the most recent financial statements filed
with the Commission, there has been no material adverse change,
and no development involving a prospective material adverse
change, in the condition (financial or other), earnings, business
or properties of the Company and its Significant Subsidiaries,
whether or not arising from transactions in the ordinary course
of business, and (z) none of the events specified in clauses (i),
(v) and (vi) in the preceding subsection (c) has occurred.
The effectiveness of the Remarketing Dealer's election on
the Notification Date to remarket the Drs. shall be subject to
the condition that the Remarketing Dealer shall have received a
certificate of any of the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, or the Controller of the Company,
satisfactory to the Remarketing Dealer, dated as of the
Notification Date, to the effect that (i) the Company has, prior
to the Remarketing Dealer's election on the Notification Date to
remarket the Drs., provided the Remarketing Dealer with notice of
all events as required under subsection 3(a) of this Agreement,
(ii) the representations and warranties in this Agreement are
true and correct at and as of the Notification Date and (iii) the
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior
to the Notification Date. Such certificate shall be delivered by
the Company to the Remarketing Dealer as soon as practicable
following notification by the Remarketing Dealer to the Company
on the Notification Date of its election to remarket the Drs. and
in any event prior to the Determination Date.
If any of the foregoing conditions are not satisfied, the
Remarketing Dealer may terminate its obligations under this
Agreement.
Section 9. Indemnification. (a) The Company agrees to
indemnify and hold harmless the Remarketing Dealer and each
person, if any, who controls the Remarketing Dealer within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted):
(i) arising out of the failure to have an effective
registration statement under the Securities Act relating to the
Drs., if required, or the failure to satisfy the prospectus
delivery requirements of the Securities Act because the Company
failed to notify the Remarketing Dealer of such delivery
requirement or failed to provide the Remarketing Dealer with an
prospectus for delivery,
(ii) caused by any untrue statement or alleged untrue
statement of a material fact contained in any of the Remarketing
Materials or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or neces
sary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused
by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with informa
tion relating to the Remarketing Dealer furnished to the Company
in writing by the Remarketing Dealer expressly for use therein,
or
(iii) the acts or omissions of the Remarketing
Dealer in connection with the performance of its duties and
obligations under subsections 4(c) through 4(f) hereof, except to
the extent finally judicially determined to be due primarily to
its gross negligence or willful misconduct.
(b) The Remarketing Dealer agrees to indemnify and hold
harmless the Company, its directors and its officers and each
person who controls the Company within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to the
Remarketing Dealer in subsection 9(a)(ii) of this Agreement, but
only with reference to information relating to such Remarketing
Dealer furnished to the Company in writing by such Remarketing
Dealer expressly for use in any of the Remarketing Materials.
(c) Promptly after receipt by any person of notice of
the commencement of any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand in
respect of which indemnity may be sought pursuant to subsection
9(a) or (b) above (an "Indemnified Person"), such person will
promptly notify the person against whom such indemnity may be
sought (an "Indemnifying Person") of the commencement thereof;
but the failure so to notify the Indemnifying Person will not
relieve it from any liability which it may have to an Indemnified
Person otherwise than under this Section 9. In case any such
action is brought against any Indemnified Person, and it notifies
the Indemnifying Person of the commencement thereof, the
Indemnifying Person will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to
the Indemnified Person promptly after receiving the aforesaid
notice from such Indemnified Person, to assume the defense
thereof, with counsel satisfactory to such Indemnified Person;
provided that if the defendants in any such action include both
the Indemnified Person and the Indemnifying Person and the
Indemnified Person shall have reasonably concluded that there may
be legal defenses available to it and/or other Indemnified
Persons which are different from or additional to those available
to the Indemnifying Person, the Indemnified Person shall have the
right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on
behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Person to such Indemnified Person of its
election to so assume the defense of such action and approval by
the Indemnified Person of counsel, the Indemnifying Person will
not be liable to such Indemnified Person under this Section 9 for
any legal or other expenses subsequently incurred by such
Indemnified Person in connection with the defense thereof unless:
(i) the Indemnified Person shall have employed
separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the
Indemnifying Person shall not be liable for the expenses of
more than one separate counsel, approved by the Remarketing
Dealer in the case of subsection 9(a) hereof, representing
the indemnified parties under such subsection 9(a) who are
parties to such action),
(ii) the Indemnifying Person shall not have
employed counsel satisfactory to the Indemnified Person to
represent the Indemnified Person within a reasonable time
after notice of commencement of the action or
(iii) the Indemnifying Person has authorized
the employment of counsel for the Indemnified Person at the
expense of the Indemnifying Person; and except that, if
clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause
(i) or (iii).
(a) The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as
contemplated by this Section 9, the Indemnifying Person agrees
that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance
with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter
of such proceeding.
(b) If the indemnification provided for in subsections
9(a) and 9(b) is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or
liabilities referred to, then each Indemnifying Person, in lieu
of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the
Remarketing Dealer, on the other hand, from the remarketing of
the Drs. or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on
the one hand and the Remarketing Dealer on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Remarketing
Dealer, on the other, shall be deemed to be in the same
respective proportions as the aggregate principal amount of the
Drs. bears to the amount, if any, by which the price at which the
Drs. are sold by the Remarketing Dealer in the remarketing
exceeds the price paid by the Remarketing Dealer for the Drs.
tendered on the Remarketing Date. The relative fault of the
Company on the one hand and the Remarketing Dealer on the other
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Remarketing
Agreement and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission.
(c) The Company and the Remarketing Dealer agree that
it would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation or by any
other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person
as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses incurred by such Indemnified Person
in connection with investigating or defending any such action or
claim.
(d) Notwithstanding the provisions of this Section 9,
in no event shall the Remarketing Dealer be required to
contribute any amount in excess of the amount by which the total
price at which the Drs. underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages that such Remarketing Dealer has otherwise been required
to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law of in equity.
(e) The indemnity and contribution agreements
contained in this Section 9 and the representations and
warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect regardless of (i)
any termination of this Agreement and (ii) any investigation made
by or on behalf of the Remarketing Dealer or any person
controlling the Remarketing Dealer or by or on behalf of the
Company, its officers or directors or any other person
controlling the Company.
Section 10. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Dealer on the
effective date of the resignation of the Remarketing Dealer
pursuant to Section 6 hereof or the repurchase of the Drs. by the
Company pursuant to subsection 4(g) hereof or the redemption of
the Drs. by the Company pursuant to subsection 4(h) hereof.
(g) In addition, the Remarketing Dealer may terminate all of
its obligations under this Agreement immediately by notifying the
Company and the Trustee of its election to do so, at any time on
or before the Remarketing Date, if:
(i) any of the conditions referred to or set
forth in subsection 8(a) or 8(b) hereof have not been met or
satisfied in full,
(ii) any of the events set forth in subsection
8(c) shall have occurred after the Remarketing Dealer elects
on the Notification Date to remarket the Drs.; or
(iii) the Remarketing Dealer determines, in
its sole discretion, after consultation with the Company,
that there is material, non-public information about the
Company that is not available to the Remarketing Dealer
which is necessary for it to fulfill its obligations under
this Agreement.
(a) If this Agreement is terminated pursuant to this Section
10, such termination shall be without liability of any party to
any other party, except that, in the case of termination pursuant
to subsection 8(a) or clause (i), (ii), (iii)(a), (v), (vi),
(vii) or (x) of subsection 8(c) hereof, the Company shall
reimburse the Remarketing Dealer for all of its reasonable
out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Remarketing Dealer. Section 9
and subsections 10(c) and 10(d) shall survive such termination
and remain in full force and effect.
(b) Upon:
(i) the termination of this Agreement pursuant to
subsection 10(b) (except as a result of an event described
in subsection 8(c)(viii)),
(ii) the occurrence, prior to the Remarketing
Dealer's election on the Notification Date to remarket the
Drs., of any event set forth in subsection 8(c)(ii), (v) or
(vi), or
(iii) a repurchase by the Company of any Drs.
due to a failure by the holder thereof to deliver the Drs.
to the Remarketing Dealer against payment therefor in
connection with a mandatory tender,
then, upon the request of the Remarketing Dealer, the Company
shall pay the Remarketing Dealer, in same-day funds by wire
transfer to an account designated by the Remarketing Dealer, the
fair market value of the embedded interest rate option implicit
in the Remarketing Dealer's right to purchase and remarket
pursuant to this Agreement the Drs. not purchased by the
Remarketing Dealer (the "Call Price"). The Call Price shall be
paid as soon as practicable after the Remarketing Dealer has
determined the Call Price and notified the Company of the Call
Price, but in any case no later than the Remarketing Date. The
Call Price in respect of any Drs. not purchased (the "Unpurchased
Drs.") by the Remarketing Dealer shall equal:
(i) if the Remarketing Dealer's request for a Call Price
payment is made on or after the Determination Date, an
amount (if positive) equal to (A) the Dollar Price
multiplied by a fraction the numerator of which is the
principal amount of the Unpurchased Drs. and the denominator
of which is the aggregate principal amount of the Drs.
originally issued less (B) the principal amount of the
Unpurchased Drs.; and
(ii) if the Remarketing Dealer's request for a Call Price
payment is made prior to the Determination Date, the
Commercially Reasonable Option Value (as defined below) on
the date of such request.
"Commercially Reasonable Option Value" means, on any date, the
amount determined by the Remarketing Dealer on such date under
Section 6(e) of the Master Agreement on a "Market Quotation"
basis in respect of the embedded interest rate option implicit in
the Remarketing Dealer's option to purchase, at 100% of the
aggregate principal value thereof, the Unpurchased Drs. as if a
"Termination Event" had occurred on such date under such interest
rate option with respect to the Company under the Master
Agreement and the Company was the "Affected Party". The
determination of the Commercially Reasonable Option Value shall
be made using the provisions of the Master Agreement regardless
of any termination of the Master Agreement.
The Remarketing Dealer shall promptly notify the Company of the
Call Price by telephone, confirmed in writing (which may include
facsimile or other electronic transmission). The Call Price,
absent manifest error, shall be binding and conclusive upon the
parties hereto.
(a) This Agreement shall not be subject to termination by the
Company.
Section 11. Remarketing Dealer's Performance; Duty of Care.
The duties and obligations of the Remarketing Dealer shall be
determined solely by the express provisions of this Agreement and
the Indenture. No implied covenants or obligations of or against
the Remarketing Dealer shall be read into this Agreement or the
Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely
upon any document furnished to it, which purports to conform to
the requirements of this Agreement and the Indenture, as to the
truth of the statements expressed in any of such documents. The
Remarketing Dealer shall be protected in acting upon any document
or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing
Dealer shall incur no liability to the Company or to any
beneficial owner or holder of Drs. in its individual capacity or
as Remarketing Dealer for any action or failure to act in
connection with the remarketing or otherwise, except as a result
of gross negligence or willful misconduct on its part.
Section 12. Governing Law. This agreement shall be governed
by and construed in accordance with the laws of the State of New
York, without giving effect to the conflicts of laws provisions
thereof.
Section 13. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof, this Agreement shall
remain in full force and effect from the date hereof until the
earlier of the first day thereafter on which no Drs. are
outstanding or the completion of the remarketing of the Drs.
Regardless of any termination of this Agreement pursuant to
any of the provisions hereof, the obligations of the Company
pursuant to Section 8 hereof shall remain operative and in full
force and effect until fully satisfied.
Section 14. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or
delegated to any other person without the prior written consent
of the Remarketing Dealer. The rights and obligations of the
Remarketing Dealer hereunder may not be assigned or delegated to
any other person (other than an affiliate of the Remarketing
Dealer) without the prior written consent of the Company. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Remarketing Dealer and their respective
successors and assigns, and will not confer any benefit upon any
other person, partnership, association or corporation other than
persons, if any, controlling the Remarketing Dealer within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or any other indemnified party to the extent
provided in Section 9 hereof. The terms "successors" and
"assigns" shall not include any purchaser of any Drs. merely
because of such purchase.
Section 15. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and
it is agreed that such section headings are not a part of this
Agreement and will not be used in the interpretation of any
provisions of this Agreement.
Section 16. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in
any or all jurisdictions because it conflicts with any provision
of any constitution, statute, rule or public policy or for any
other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or
of rendering any other provision or provisions of this Agreement
invalid, inoperative or unenforceable to any extent whatsoever.
Section 17. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same
document.
Section 18. Amendments; Waivers. This Agreement may be
amended or portions thereof may be waived by any instrument in
writing signed by each of the parties hereto so long as this
Agreement as amended or the provisions as so waived are not
inconsistent with the Indenture in effect as of the date of any
such amendment or waiver.
Section 19. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made
hereunder or pursuant hereto shall be made in writing (which may
include facsimile or other electronic transmission) and shall be
deemed to have been validly given or made when delivered or, if
earlier, three days after it was mailed, registered or certified
mail, return receipt requested and postage prepaid, addressed as
follows:
(a) to the Company:
AlliedSignal Inc.
101 Columbia Road
Morristown, NJ
Attention: Treasurer
Facsimile No.: 973-455-5189
(b) to JPMSI:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Syndicate Department
Facsimile No.: (212) 648-5909
or to such other address as the Company or the Remarketing Dealer
shall specify in writing.
<PAGE>
IN WITNESS WHEREOF, each of the Company and the Remarketing
Dealer has caused this Remarketing Agreement to be executed in
its name and on its behalf by one of its duly authorized officers
as of the date first above written.
ALLIEDSIGNAL INC.
By /s/ John W. Gamble, Jr.
Name: John W. Gamble, Jr.
Title: Assistant Treasurer
J.P. MORGAN SECURITIES INC.
By /s/ David Olsen
Name:David Olsen
Title:Vice President
